Archive for December, 2010

When Moving Seems Impossible

Posted on December 30, 2010 by Jason

The New York Times, December 30th, 2010

Patricia Wendler had been trying to sell her Southport, N.C., home
for four years. Just before Thanksgiving, she finally got an offer, with
one major contingency: Mrs. Wendler, 80, had less than three weeks to
move, or no deal.

She and her husband, who died in 2008, had retired to Southport 16
years ago from New Hartford, N.Y. In that time, the Wendlers had
accumulated furniture that wouldn’t fit in her new apartment, tools she
wouldn’t need and years upon years of paperwork. “I kind of stored
everything,” she said.

Her daughter-in-law, June Wendler, described the task of relocation
as a “tornado.” She called Jane Roberts, a senior move manager in
Wilmington, N.C., for help.

Initially, Patricia Wendler was not thrilled.

“I was a little resentful,” she said. “Why would I need someone like that? I’m not used to having people do things for me.”

The Wendlers are among more than 50,000 families to hire a certified
senior move manager this year, up from 30,000 just two years ago,
according to the National Association of Senior Move Managers. These
services don’t come cheap: Most move managers charge $25 to $60 per
hour. A top-to-bottom move can require several days of planning, packing
and unpacking, running $1,500 to $4,000 or more — not including the
cost of the actual movers.

Despite the expense, many families are finding senior move managers
indispensable, and not just because they handle the logistics. Tensions
can spill over when an elderly parent must relocate. Hundreds of
necessary decisions and actions can swallow time the family may not
have; the inevitable negotiations and concessions can trouble even the
best parent-child relationships.

Surveys show that the elderly overwhelmingly wish to remain in their
long-term homes, and to many of them moving represents a loss of
control. “These moves usually are precipitated by something that’s
happened — a health crisis, a death of a spouse, a loss of driving
ability,” said Margit Novack, a senior move manager in Philadelphia.

A good move manager helps to clear a path to the new home while
ensuring that the senior is always in control, regardless of who made
the first call. “These people don’t want anyone telling them what to do.
You have to walk a very fine line,” said Ms. Roberts.

Read more of this article.

Relocation Assistance:  Many Seniors who are retiring or downsizing elsewhere find that they need help in the herculean logistic task of getting to their new home with all their possessions, and setting themselves up there.  Relocation Assistance covers a variety of services that can help seniors with the often-traumatic process.

As boomers wrinkle

Posted on December 30, 2010 by Jason

The Economist, December 29th, 2010

FROM the moment they entered the workforce in the 1960s, baby-boomers
began to shape America’s economy and politics. They will do the same as
they leave. The first of the estimated 78m Americans born between 1946
and 1964 turn 65 in 2011, the normal age for retirement. As their ranks
swell in coming years, the burden of financing their retirement will
mount. So will their electoral importance.

Retiring boomers will squeeze the economy from two directions. The
number of people enrolled in Medicare (federally funded health care,
available from the age of 65) will grow from 47m in 2010 to 80m in two
decades’ time. Enrolment in Social Security (federally funded pensions,
available from the age of 62-67, depending on your birth year) will grow
from 44m to 73m. The cost of the two programmes will grow from 8.4% of
GDP in 2010 to 11.2% by 2030. Meanwhile, as boomers retire, the
workforce will grow more slowly, as will the taxes to finance their
benefits. The pensioner-worker imbalance and health-care inflation,
which is driving up the bill for Medicare and Medicaid, the federal
health benefit for the poor, will send the budget deficit into the
stratosphere.

Both Barack Obama and Republicans in Congress claim that reforming
such entitlements is a priority. But a demographic snag lies in the way.
In the next two decades people aged 65 and over will rise from 17% of
the voting-age population to 26% (see chart 1). Since the old vote more
readily, their actual share of the electorate will be some three
percentage points higher, reckons Robert Binstock, a political scientist
at Case Western Reserve University in Cleveland.

In the past the political priorities and voting preferences of the
elderly were much like everyone else’s. Mr Binstock says this may be
because ideological, economic or national-security issues loomed larger
than greybeard ones, such as pensions. Or it may be because politicians,
terrified of political retribution, avoided anything that would offend
the old.

Advocacy groups, especially the almost 40m-member AARP (formerly the
American Association of Retired Persons), have exploited this fear.
Their support helped George Bush create the Medicare drug benefit in
2003, and their opposition helped kill his proposal for private Social
Security accounts a few years later. In December, while most of
Washington was transfixed by the tax deal between Mr Obama and the
Republicans, AARP took aim at a scheduled cut in Medicare fees to
doctors. After 100,000 of its members wrote, e-mailed and phoned,
Congress voted almost unanimously to override the cuts, despite the $15
billion price tag.

Read more of this article.

What you pay for Medicare won’t cover your costs

Posted on December 30, 2010 by Jason

Boston Herald, December 30th, 2010

You paid your Medicare taxes all those years and think you deserve your money’s worth: full benefits after you retire.

Nearly three out of five people say in a recent Associated Press-GfK
poll that they paid into the system so their benefits shouldn’t be cut.

But a newly updated financial analysis shows that what people paid
into the system doesn’t come close to covering the full value of the
medical care they can expect to receive as retirees.

Consider an average-wage, two-earner couple together earning $89,000 a
year. Upon retiring in 2011, they would have paid $114,000 in Medicare
payroll taxes during their careers.

But they can expect to receive medical services — from prescriptions
to hospital care — worth $355,000, or about three times what they put
in.

The estimates by economists Eugene Steuerle and Stephanie Rennane of
the Urban Institute think tank illustrate the huge disconnect between
widely-held perceptions and the numbers behind Medicare’s shaky
financing. Although Americans are worried about Medicare’s long-term
solvency, few realize the size of the gap.

“The fact that you put money into the system doesn’t mean it’s there waiting for you to collect,” said Steuerle.

By comparison, Social Security taxes and expected benefits come closer to balancing out.

The same hypothetical couple retiring in 2011 will have paid $614,000
in Social Security taxes, and can expect to collect $555,000 in
benefits. They will have paid about 10 percent more into the system than
they’re likely to get back.

Many workers may believe their Medicare payroll taxes are going for
their own insurance after they retiree, but the money is actually used
to pay the bills of seniors currently on the program.

Read more of this article.

Supplemental Medicare Insurance:  Medicare’s solvency is an ongoing problem that is only going to get more heated.  Even if the benefits you qualify for are not cut, however, it may be necessary for you to supplement Medicare with other insurance.

Baby boomers fear outliving Medicare

Posted on December 29, 2010 by Jason

Yahoo News, December 29th, 2010

The first baby boomers will be old enough to qualify for Medicare
Jan. 1, and many fear the program’s obituary will be written before
their own.

A new Associated Press-GfK poll finds that baby
boomers believe by a ratio of 2-to-1 they won’t be able to rely on the
giant health insurance plan throughout their retirement.

The boomers took a running dive into adolescence and
went on to redefine work and family, but getting old is making them
nervous.

Now, forty-three percent say they don’t expect to be
able to depend on Medicare forever, while only 20 percent think their
Medicare is secure. The rest have mixed feelings.

Yet the survey also shows a surprising willingness among adults of all ages to sacrifice to preserve Medicare benefits that most Americans say they deserve after years of paying taxes into the system at work.

Take the contentious issue of Medicare’s eligibility age, fixed at 65, while the qualifying age for Social Security is rising gradually to 67.

Initially, 63 percent of boomers in the poll
dismissed the idea of raising the eligibility age to keep Medicare
afloat financially. But when the survey forced them to choose between
raising the age or cutting benefits, 59 percent said raise the age and
keep the benefits.

“I don’t mind the fact that people may have to work a
little longer,” said Lynn Barlow, 60, a real estate agent who lives
outside Atlanta. Especially if there’s time to plan, laboring a few
extra years allows people to save more for retirement.

Bring up benefit cuts
and Barlow isn’t nearly as accommodating. “I started working when I was
16 and I expect a benefit after putting into it for so many years,” she
said.

As Medicare reaches a historic threshold, the poll
also found differences by age, gender and income among baby boomers. For
example, baby boom women, who can expect to live longer than both their
mothers and their husbands, are much more pessimistic than men about
the program’s future.

Medicare is a middle-class bulwark against the
ravages of illness in old age. It covers 46 million elderly and disabled
people at an annual cost of about $500 billion. But the high price of
American-style medicine, stressing intensive treatment and the latest
innovations, is already straining program finances. Add the number of
baby boomers, more than 70 million born between 1946 and 1964, and
Medicare’s fiscal foundation starts to shake.

Read more of this article.

Supplemental Medicare Insurance:  We do not anticipate Medicare disappearing entirely, but it is entirely possible that the program will undergo major changes in the near future.  As such, considering insurance to supplement Medicare now may be a good plan.

Who Thrives After Surgery?

Posted on December 29, 2010 by Jason

The New York Times, December 27th, 2010

Martin A. Makary,
a surgeon and public health researcher at Johns Hopkins Hospital in
Baltimore, had a long talk with a patient last week. The man had a
tumor in his pancreas that was probably benign but might not be. Should
Dr. Makary remove it? Or should the man have regular scans to see
whether it grew?

“If you’re 25, the decision is easy — get rid of that risk,” Dr. Makary told me afterward. But this patient was 89.

Let’s pause for a moment to consider the changing surgical landscape.
When Dr. Makary was in training, he recalled, surgeons were just
starting to offer elective procedures to patients in their 70s. Now,
with better techniques, safer anesthesia and, of course, more old people
— half of all operations in the United States are performed on those
over age 65.

“It’s become acceptable to do major procedures on very old patients,”
he said. “We routinely do elective surgery on people in their 80s and
90s.”

That doesn’t mean it’s always a good idea, or that it’s easy to
calculate the costs and benefits. How very old patients respond to
surgery has proved unpredictable. “There are some people you worry
won’t do well, and then they fly,” Dr. Makary said. “And some people
you are confident will do well have a cascade of symptoms that lead to
their demise or permanent disability — and everybody is shocked.”

Surgeons eyeball their patients all the time to try to evaluate
whether they can recover well from the stress of an operation, but it’s
an inexact science. “You can be thrown off by hair or teeth or
wrinkles, things that don’t have much to do with physiologic reserve,”
Dr. Makary said.

The usual tests surgeons use to try to predict how older patients
will fare are crude, Dr. Makary added, mostly based on cardiovascular
strength. And standard estimates of mortality and length of
hospitalization for specific operations are all but useless for patients
who might be 30 or 40 years older than the norm.

But thanks to a rather elegant piece of research
by a Johns Hopkins team, recently published in The Journal of the
American College of Surgeons, surgeons can give more informative answers
when elderly patients in this situation, or their families, wonder what
to do.

Read more of this article.

Alabama Town’s Failed Pension Is a Warning

Posted on December 27, 2010 by Jason

The New York Times, December 22nd, 2010

This struggling small city on the outskirts of Mobile was warned for
years that if it did nothing, its pension fund would run out of money by
2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never
seen before: it stopped sending monthly pension checks to its 150
retired workers, breaking a state law requiring it to pay its promised
retirement benefits in full.

Since then, Nettie Banks, 68, a retired Prichard police and fire
dispatcher, has filed for bankruptcy. Alfred Arnold, a 66-year-old
retired fire captain, has gone back to work as a shopping mall security
guard to try to keep his house. Eddie Ragland, 59, a retired police
captain, accepted help from colleagues, bake sales and collection jars
after he was shot by a robber, leaving him badly wounded and unable to
get to his new job as a police officer at the regional airport.

Far worse was the retired fire marshal who died in June. Like many of the others, he was too young to collect Social Security.
“When they found him, he had no electricity and no running water in his
house,” said David Anders, 58, a retired district fire chief. “He was a
proud enough man that he wouldn’t accept help.”

The situation in Prichard is extremely unusual — the city has sought
bankruptcy protection twice — but it proves that the unthinkable can, in
fact, sometimes happen. And it stands as a warning to cities like
Philadelphia and states like Illinois, whose pension funds are under
great strain: if nothing changes, the money eventually does run out, and
when that happens, misery and turmoil follow.

It is not just the pensioners who suffer when a pension fund runs dry.
If a city tried to follow the law and pay its pensioners with money from
its annual operating budget, it would probably have to adopt large tax
increases, or make huge service cuts, to come up with the money.

Current city workers could find themselves paying into a pension plan
that will not be there for their own retirements. In Prichard, some
older workers have delayed retiring, since they cannot afford to give up
their paychecks if no pension checks will follow.

Read more of this article.

Obama Returns to End-of-Life Plan That Caused Stir

Posted on December 27, 2010 by Jason

The New York Times, December 25th, 2010

When a proposal to encourage end-of-life planning touched off a
political storm over “death panels,” Democrats dropped it from
legislation to overhaul the health care system. But the Obama
administration will achieve the same goal by regulation, starting Jan.
1.

Under the new policy, outlined in a Medicare
regulation, the government will pay doctors who advise patients on
options for end-of-life care, which may include advance directives to
forgo aggressive life-sustaining treatment.

Congressional supporters of the new policy, though pleased, have kept
quiet. They fear provoking another furor like the one in 2009 when
Republicans seized on the idea of end-of-life counseling to argue that
the Democrats’ bill would allow the government to cut off care for the
critically ill.

The final version of the health care legislation, signed into law by President Obama
in March, authorized Medicare coverage of yearly physical examinations,
or wellness visits. The new rule says Medicare will cover “voluntary
advance care planning,” to discuss end-of-life treatment, as part of the
annual visit.

Under the rule, doctors can provide information to patients on how to
prepare an “advance directive,” stating how aggressively they wish to be
treated if they are so sick that they cannot make health care decisions
for themselves.

While the new law does not mention advance care planning, the Obama
administration has been able to achieve its policy goal through the
regulation-writing process, a strategy that could become more prevalent
in the next two years as the president deals with a strengthened
Republican opposition in Congress.

In this case, the administration said research had shown the value of end-of-life planning.

“Advance care planning improves end-of-life care and patient and family
satisfaction and reduces stress, anxiety and depression in surviving
relatives,” the administration said in the preamble to the Medicare
regulation, quoting research published this year in the British Medical Journal.

The administration also cited research by Dr. Stacy M. Fischer, an assistant professor at the University of Colorado
School of Medicine, who found that “end-of-life discussions between
doctor and patient help ensure that one gets the care one wants.” In
this sense, Dr. Fischer said, such consultations “protect patient
autonomy.”

Opponents said the Obama administration was bringing back a procedure
that could be used to justify the premature withdrawal of
life-sustaining treatment from people with severe illnesses and
disabilities.

Section 1233 of the bill passed by the House in November 2009 — but not
included in the final legislation — allowed Medicare to pay for
consultations about advance care planning every five years. In contrast,
the new rule allows annual discussions as part of the wellness visit.

Elizabeth D. Wickham, executive director of LifeTree,
which describes itself as “a pro-life Christian educational ministry,”
said she was concerned that end-of-life counseling would encourage
patients to forgo or curtail care, thus hastening death.

“The infamous Section 1233 is still alive and kicking,” Ms. Wickham
said. “Patients will lose the ability to control treatments at the end
of life.”

Several Democratic members of Congress, led by Representative Earl Blumenauer of Oregon and Senator John D. Rockefeller IV
of West Virginia, had urged the administration to cover end-of-life
planning as a service offered under the Medicare wellness benefit. A
national organization of hospice care providers made the same recommendation.

Mr. Blumenauer, the author of the original end-of-life proposal, praised the rule as “a step in the right direction.”

“It will give people more control over the care they receive,” Mr.
Blumenauer said in an interview. “It means that doctors and patients can
have these conversations in the normal course of business, as part of
our health care routine, not as something put off until we are forced to
do it.”

Read more of this article.

Baby boomers near 65 with retirements in jeopardy

Posted on December 27, 2010 by Jason

Yahoo News, December 27th, 2010

Through a combination of procrastination and bad timing, many baby
boomers are facing a personal finance disaster just as they’re hoping to
retire. Starting in January, more than 10,000 baby boomers a day will
turn 65, a pattern that will continue for the next 19 years.

The boomers, who in their youth revolutionized
everything from music to race relations, are set to redefine retirement.
But a generation that made its mark in the tumultuous 1960s now faces a
crisis as it hits its own mid-60s.

“The situation is extremely serious because baby
boomers have not saved very effectively for retirement and are still
retiring too early,” says Olivia Mitchell, director of the Boettner
Center for Pensions and Retirement Research at the University of
Pennsylvania.

There are several reasons to be concerned:

• The traditional pension plan is disappearing. In
1980, some 39 percent of private-sector workers had a pension that
guaranteed a steady payout during retirement. Today that number stands
closer to 15 percent, according to the Employee Benefit Research Institute in Washington, D.C.

• Reliance on stocks in retirement plans is greater
than ever; 42 percent of those workers now have 401(k)s. But the past
decade has been a lost one for stocks, with the Standard & Poor’s
500 index posting total returns of just 4 percent since the beginning of
2000.

• Many retirees banked on their homes as their
retirement fund. But the crash in housing prices has slashed almost a
third of a typical home’s value. Now 22 percent of homeowners, or nearly
11 million people, owe more on their mortgage than their home is worth.
Many are boomers.

Michael Vanatta, 61, of Vero Beach, Fla., is paying
the price for being a boomer who enjoyed life without saving for the
future. He put a daughter through college, but he also spent plenty of
money on indulgences like dining out and the latest electronic gadgets.

Vanatta was laid off last January from his
$100,000-a-year job as a sales executive for a turf company. And with
savings of just $5,000, he’s on a budget for the first time. In April,
he will start taking Social Security at age 62.

“If I’d been smarter and planned and had the bucks,
I’d wait until 70,” says Vanatta, who is divorced and rents an
apartment. “It’s my fault. For years I was making plenty of money and
spending plenty of money.”

Vanatta is in the majority. Some 51 percent of early
boomer households, headed by those ages 55 to 64, face a retirement with
lower living standards, according to a 2009 study by the Center for Retirement Research at Boston College.

Too many boomers have ignored or underestimated the
worsening outlook for their finances, says Jean Setzfand, director of
financial security for AARP, the group that represents Americans over
age 50. By far the greatest shortcoming has been a failure to save. The
personal savings rate — the amount of disposable income unspent —
averaged close to 10 percent in the 1970s and `80s. By late 2007, the
rate had sunk to negative 1 percent.

Read more of this article.

Retirement Calculator:  Have you saved enough for your retirement?  Is retirement going to bite you when the time comes?  Consider how bad things are, and what steps you can take to resolve them with a retirement calculator at NewRetirement.com

Where to retire? Florida is most popular state

Posted on December 23, 2010 by Jason

Reuters, December 17th, 2010

Baby boomers planning to retire and move house could be heading to
Florida, which has eight of the 10 most popular cities for U.S. seniors,
according to a new poll.

Not all of the 3 million Americans who will turn 65 next year will be
moving, but those who do will most likely chose warm cities such as
Bradenton-Sarasota in Florida, which was voted the most popular city in
the U.S. for retirement.

More than a quarter of the city’s population is made up of seniors,
compared to a national average of about 13 percent. With a population of
688,126, it was also the biggest city among the top 10 in the list
compiled by the national business news website Portfolio.com.

“In addition to warm cities, we’ve also seen that seniors are attracted
to communities that already have a significant population of retirees,”
said J. Jennings Moss, the editor of Portfolio.com

Prescott and Lake Havasu City, both in Arizona, were the second and
third most popular destinations for seniors, followed by Cape Coral-Fort
Myers and Naples in Florida.

Portfolio.com ranked 157 metropolitan areas using data from the American
Community Survey conducted in 2009 by the U.S. Census Bureau. The
cities were ranked on: seniors as total share of population, median age,
the number of seniors born in and out of state and the difference in
out-of-state births.

“What we were looking for were places that have substantial senior
populations and also populations that are growing at an unusually rapid
rate,” G. Scott Thomas, a demographer who created the analysis,
explained in an interview.

“Obviously both of those places (the top two cities) are attractive
because of weather but also because they developed the infrastructure
for retirees over the years,” he added in an interview.

Palm Bay-Melbourne, Homosassa Springs, Ocala, Punta Gorda and Port St.
Lucie, all in Florida, rounded out the top 10 retirement destinations.

Nearly all the most popular locations were coastal cities.

Although the top 10 locations were in the southeast and southwest,
Thomas said there were some exceptions, including Seaford in Delaware,
Barnstable in Massachusetts, which includes Cape Cod, and Eugene,
Oregon. All were among the top 30 cities.

Read more of this article.

Relocation assistance:  Relocating from one city to another is never easy, and particularly not while one is in retirement.  There are a number of companies and even free services that exist to make the process slightly easier on seniors.  Consider the options at NewRetirement.com

New Medicare rules on medical supplies aim to save

Posted on December 23, 2010 by Jason

Arizona Sun-Sentinel, December 22nd, 2010

A federal crackdown on Medicare
fraud and overspending will force South Florida seniors to think twice
about where they buy walkers, motorized wheelchairs, mail-order diabetes supplies and other equipment.

Starting
Jan. 1, Medicare will pay only for certain equipment that comes from a
vendor who has been screened and selected through competitive bidding.
Affected items include feeding-tube supplies, mail-order diabetic
supplies, oxygen equipment, respiratory devices, mattresses, hospital
beds and motorized scooters.

Failure to buy from an approved shop
could leave seniors stuck paying the entire cost of their medical
supplies, Medicare warned. The change may be awkward, but it will save
seniors and the Medicare program a significant sum, said Jonathan Blum,
deputy administrator of the Centers for Medicare & Medicaid
Services.

“Over the next 10 years, our actuaries estimate it will
save $17 billion for the Medicare Part B trust fund and $11 billion for
our beneficiaries,” Blum said Monday. “There is tremendous evidence that
the program pays too much for these items and supplies.”

Read more of this article.

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